5 Rules to Remind Yourself When Converting a Business Idea into an Action Plan
Eureka! You wake up one morning with a buzzing idea that will transform into a successful enterprise.
After spending the first 5 minutes searching for your business diary, you jot down all the necessary actions to take, excited about the prospects of how big this idea could potentially be.
Fast forward 3 months.
The idea remains jotted down in your diary, but there aren’t any meaningful contributions or any tangible impact that you created out of it. You question yourself
“Why, oh why am I unable to transform my ideas into any concrete action plan.”
The answer is revealed in this article.
REASONS WHY ACTION STRATEGIES ARE SO IMPORTANT TO A BUSINESS
According to Sir Isaac Newton’s third law of motion, for every action, there is an equal and opposite reaction.
Based on this we firmly believe that for every action plan set, there is certainly going to be a business foundation at the end.
One of the biggest reasons people fail in visualizing their business idea is because until a commitment to act is made, the plan remains an illusion and is only a promise with no reality to it.
Don’t take our word for it, these are the words of Peter F. Drucker, an American management consultant, who swears by it.
So how does a sample business plan look on paper?
Where do I start?
How do I put forth my idea on paper?
If these questions keep nagging you, then allow us to demonstrate a sample business idea below.
Let’s begin with the most important steps.
Step 1. Business Summary (Description)
This is the main part of your business plan. Your basic idea on what to do for a living.
In this part of your plan, list down all the types of key aspects that you’d see in your business model.
For example, if you’d like to run a store that sells seafood, then come up with a quirky description such as:
“Fish Paradise. We sell the finest fish in all of Louisiana. Our fish is freshly caught and brought to the warehouse and straight to your kitchen. We fully understand nutrition is of great importance to your health and that’s why we ensure our fish are stocked in thick oak-barrels with vinegar to retain their freshness. Our store is open from 10.00 a.m. to 6 p.m. for 6 days a week. We are closed on all Sundays. “
In the above description, you gave the following information to your customers.
- What your store is about
- The quality of your product
- Timings of your store
- The lengths at which you go to retain the quality of your product
- The procedure of bringing the product to their households
A business summary introduces your business to your client.
The customer immediately understands what your business is about, and this puts up a clear motive on the type of wares you are selling.
Hence, it’s in your best interests to ensure your business summary lists down all the vital points of your business model.
Step 2. Product Desire (Demand)
With the description firmly marked down, the next important section is understanding the demand for your product.
The formula is simple to gain profits – Demand = Profits.
If your product doesn’t have a demand, then you’ll have a harder time disposing of your products especially if it’s perishable consumables such as seafood that have an expiry date.
The following questions should give you the right idea on whether your product is in demand or not.
Defining your target audience?
Who is buying from you? Are you a wholesaler or a retailer?
What benefits does your product provide?
If it’s food, then demonstrate the nutritional benefits. If it’s a tool, define its usability.
Does your market have room for expansion?
Is there a scope to move from a small-scale business into a large industry?
Are your prices competitive?
When was the last time you researched your competitors and checked out their price list?
How many people have shown interest in your product?
Do a survey by providing samples to people in and around the area. See whether it’s a positive response or not. If not, then ask them to fill in a survey form on what needs to improve.
To understand if your products are a cash cow or not, plenty of research needs to go into your product before you launch your business.
Step 3. Market Challengers (Competition)
While new business owners are oblivious to the fact on who exactly their competition is, a successful business strategy incorporates all competitors to understand and gain information on the type of market that they’d be going against.
Unless you’ve got a Unique Selling Proposition (USP) to outperform established companies with your products, the chances of beating out your competition in sales are extremely low in the first few years.
Here are the Basic Questions to Ask Yourself to Gain Information on Your Rivals
Who are your direct competitors?
Direct competitors sell products that are within your specific market. The more general your product idea is, the more direct competitors you’ll face.
Who are your indirect competitors?
Indirect competitors may not directly sell the products in your specific market, but they make a large difference in satisfying most demands raised by your customers.
A great example would be if you are selling bathing soap as your product, an indirect competitor would be a company that sells shower gel. While not the same product, they are satisfying the demand for personal hygiene.
Will your USP bring your brand to the forefront?
USP doesn’t just mean a fancy one-time trick to lure your customers. When they find out it’s nothing but a sales gimmick, you risk affecting your brand negatively and thereby, your sales.
A solid USP is a strategy that attracts customers through either effective pricing, product improvement or promotional characteristics that set your product apart from the rest.
Step 4. Location (Demographics)
If your shop is a physical store, where would be a desirable location for it?
You’d have more customers if you sold distilled water near gyms or you’d have an increased presence of audience if you sold beauty products at a mall where youngsters throng to.
Location is key to selling your products and the questions to ask yourself are –
What kind of space do I need?
Are you able to handle stocking up your products at a warehouse? Do you feel you need a bigger space to stock your products next to your storefront?
Am I able to target my audience in this location?
Knowing whether you’ll attract your audience or not is the key difference in generating profits. You don’t want to be stuck investing half your finances only to find out that your location is a bad one.
Are there any competitors in the vicinity?
If you’ve got competition, prepare yourself with a USP before launching your product. If you’ve got no competitors and a great audience, there’s absolutely no reason to not find success in your niche.
Step 5. Cashflow (Finances)
While a good idea is required for a successful business plan, knowing where to invest money and having a forecast of your cash flow is critical in shaping your business plan.
Here’s why a financial projection will get the best out of your business
- A financial projection enables the type of investments you’ll invest in
- It provides you with a complete list of assets and a detailed pricing list
- Provides you with long-term information on the sales and purchases within the company
- Keeps a record of all the equity, partner investments, debt allocation, operational profits, etc.
- Gives you a complete picture of the required capital for starting your business
Apart from finances, documentation is just as important for the business.
Having the required licenses to sell your product and leases for the property are some important documents that you’ll require.
And there you have it. The 5 core requirements for starting any business plan – Description, Demand, Competition, Demographics, and Finances.
Once you’ve created a business plan centered around these 5 core aspects, you’ll be able to take a call on the type of personnel required to run your business and types of assets to procure.
5 RULES TO KEEP IN MIND WHEN CHANNELING A BUSINESS IDEA INTO AN ACTION PLAN
Now that you understand what an action plan looks like, the next step is to get from “Point A” to “Point B”.
In this case Point A represents a Business idea on paper and Point B represents executing the Action Plan.
This transition process is where many entrepreneurs usually quit before their business takes shape.
Hence, it’s extremely critical to ensure you equip yourself with the right business tactics to deliver the plan as per your blueprints.
Here are 5 rules to smoothen the process and teach you the ways of enacting your vision as planned.
Rule 1. Beware of Various Business Risks
Starting a business for the first time is like learning to drive a car.
As you enter the car, you feel nervous yet strangely excited to be doing it.
You feel the adrenaline when you first turn the ignition on and as your foot gets ready to hit the accelerator’s pedal.
The risk is apparent, you could crash the car if you aren’t careful, but you’ve strapped your safety belt on for these very circumstances.
In business, your safety belt comes in the form of taking risks that you handle with your current finances.
Here are 4 Types of Business Risks You’re Likely to Come Across When Creating Your Action Plan
The granddaddy of all risks – financial risks are the bread and butter of every business idea.
At some point during your business plan, a financial risk could rear its ugly head when external factors such as financial planning and non-payment of dues are not considered. A financial risk could severely dent your business and cost problems such as
- Unable to run business operations due to staggering losses
- Asset liquidity could lead to substantial loss
- Low credit score means unable to secure loans
- The crash of your entire business model due to low finances
Sometimes you miss the little things when making decisions in your business and this causes a hole in your business strategy.
Every decision needs to be weighed and heavily accounted for before it’s given a green check mark. Here are a few examples of strategical risk factors –
- Not setting clear business goals in the beginning
- Not identifying potential risks beforehand
- Not conducting enough research on the market for your business plan
- Not having enough tolerance levels and undermining your key risk indicators (KYI)
- Not conducting competitor analysis
The modern world usually converts every business idea into a digital variation. No doubt, you have plans to launch your business idea across the digital format to target a wide audience.
With technology comes greater risk such as software malfunction, cyber-attacks, and hardware inconsistencies. Here are a few ways to ensure you have a trouble-free digital launch.
- Invest in top anti-virus programs and software. Keep them updated.
- Conduct backups constantly. Losing valuable data can cause irreversible damage.
- Secure data protection by creating a cybersecurity plan
- If clients request data, create passwords and share the file
- Ensure all payment gateways are encrypted
Employees are the most critical force and the driving idea behind any business idea. But without proper supervision, they are a risk to the business in several ways.
Since human behavior can’t be monitored like technology or strategies, it’s necessary to safeguard your business from the following human risks.
- Risk of negative publicity from criminal behavior such as sexual harassment or theft from employees
- Non-compliant employees are hazardous and are a safety risk to other employees
- Recruitment must screen through every employee’s personal database to ensure all criminal activity is reported
- Protect your business by offering contracts that oversee fraudulent activities and embezzlement
Every business needs to protect themselves from numerous risks and find solutions to new ones on the go.
Maintain dedicated records of personnel, data, cyber threats, etc. on a constant basis and create a risk management plan.
When you embrace risk into your business plan, you’ll effectively combat all forms of disruptions that are thrown towards your business journey.
Rule 2. Patience is the road to Success
Every seed planted today takes years to grow into a tree before you see the fruit.
A business is no different during its inception phase and it requires patience to manifest itself into a full-grown successful venture that generates profits.
Often, we are impatient, and this causes our plans to self-sabotage. Impatience is a red flag for every business idea and it detracts you from achieving success.
Here are 3 reasons why you require patience to grow your business.
Reason 1: To Build a Reputation
A business needs to conceptualize entirely before you begin building dedicated relationships with your customers.
Depending on your style of providing services, you’ll either have loyal and returning customers or one-time customers with a bad experience.
Loyal customers are created through reputation and exceptional customer service, both of which takes years to build up.
A study in New Zealand has shown that customer loyalty is a highly profitable market in the field of hospitality management. The research was conducted among a chain of hotels around New Zealand and most of the findings showed that hotel owners highly regarded their returning customers in generating profits for their respective hotels.
Therefore, it’s of utmost importance to have patience when converting your business model into a full-fledged action plan.
Reason 2: Improves Tolerance Levels
Patience improves our threshold to withstand difficult challenges.
Every challenge in business is unique and requires various levels of our personal attributes such as courage, optimism, foresight, cognitive behavior, and mental strength.
With patience, you’ll judge the core strengths of your employees and recruit the finest talent alongside improving your company’s overall productivity.
Building our inner tolerance levels demonstrates the difference between how easily we crack under pressure and moving forward without wasting valuable time and money.
Business is an unpredictable scenario. The best of us don’t have the foresight to completely oversee the complications that arise and hence, it’s during these times that our mental strength is put to test.
Those of us that soak in the pressure, go on to build successful enterprises. The others simply fail and give up.
Reason 3: Smarter Choices
The top 3 companies in the world – Amazon, Microsoft, and Apple built their legacy through years of trial and error. In his own admission, Jeff Bezos the CEO of Amazon claimed: “I’ve made billions of dollars of failures”. Similarly, Microsoft and Apple were at war with each other during the ’80s and made several mistakes that affected their brand image negatively.
Despite all the early failures, what made these top companies a success story today?
The answer is – Patience. Every successful company understands that mistakes are a part and parcel of life and it takes the right idea to be implemented before success knocks on their door.
While many companies give up during their first big failure, the top companies today have stood the test of time and have made it big after enduring numerous issues that plagued their companies for years.
Rule 3. Break down Goals into Milestones
Goals are large. Goals seem unachievable due to their sheer size.
Breaking each goal into a series of short milestones makes the business idea convenient to achieve.
Think of a goal as a giant loaf of bread, would you eat the entire loaf in one bite? That’s impossible and unhealthy.
Therefore, every large goal should be cut into little bits and pieces to ensure you’ll achieve them.
For example, let’s say you require $100,000 to run your business. Now $100,000 is a lot of money and it’s a big goal to achieve if you don’t find individuals to fund you. If you were to first cut down the $100,000 into small bits of money such as raising your first $10,000 milestone. The idea of raising $100,000 wouldn’t look monstrous.
The idea behind breaking your goals into achievable milestones is to have complete control over your project and be smart in planning.
Here are a few tips that’ll help you to achieve your milestones.
- Time your milestones. By keeping a time limit on your milestone, you’ll stop yourself from procrastinating your goals. More on time goals in the section below.
- Reward yourself after every milestone. An incentive provides you with motivation to complete a tough milestone.
- Give yourself a realistic deadline. Overworking is never fun, instead, give yourself plenty of flexible deadlines to achieve your target milestone.
- Frequency. Always move on to your next milestone on the list as you complete your previous one. Spacing out can leave you with room to stall your project entirely.
- Calendars serve as useful reminders if there are important milestones to achieve, mark them down and write a short note to remind yourself to achieve them.
And finally, the biggest tip to maintain consistency in achieving your milestones – Accountability.
If you are working by yourself in setting down a business plan, it’s necessary to play your role in achieving it. If it’s a collaborated effort, it’s time to hold every team member accountable for their role.
Transforming a business idea into an action plan requires you to monitor your progress regularly and know how far you’ve made it past the planning stage.
Rule 4. Understand Your Vision
Every business idea that achieves positive results needs to find the right audience.
Therefore, it’s extremely crucial to understand your vision before stepping foot into your business.
A vision should be simple and easy to accomplish.
For example, if you’d like to sell used automobiles, first know what goes into your cars before you sell them to your customers. Get to know the engine, steering wheel, gearbox, tail lights, tires, and other parts. When you invest time to understand your vision, naturally, you’ll convert this knowledge into sales.
To sell your vision, pretend you’re selling an elevator pitch to a board of investors in front of you. Here are the first questions that you’d ask yourself to get their attention.
How do I create a powerful pitch to impress the investors?
What kind of financing do I require to make my vision a reality?
Why should the investors care about my idea?
Do I understand everything there is to know about my business before I sell my pitch?
Questions give you answers.
And questions about your vision gives clarity to your vision. Asking hypothetical questions to yourself is a good start to find out the flaws of your vision and iron them out before you sell them to your customers.
Here are 3 Ways to Ensure That Your Vision is Valued
A Helpful and Motivating Mission Statement
If your visions come with inspiring beliefs and benefits society, then your brand will be a roaring success. Let’s take a few popular companies and their mission statements.
- IKEA – “To create a better everyday life for the many people.”
- TED – “Spread ideas”
- JetBlue – “To inspire humanity – both in the air and on the ground”
- American Express – “We work hard every day to make American Express the world’s most respected brand.”
- Zappos – “Delivering Happiness to customers, employees, and vendors.”
Positive missions’ statements capture attention. Converting your vision into a success mantra enables growth and maximizes the effectiveness of your product sales around the globe.
A Futureproof Vision
Visions should aspire to stand the test of time. When an organization takes the time to sell world-class products with innovative concepts, it usually goes on to do well for many years.
Here are a few companies that have managed to stay fresh for decades thanks to innovation.
- Microsoft – The company has managed to capture the software market since its inception and is still among the top 5 companies in the world. Microsoft has shifted its technologies and has designed various software to suit the modern world, the winning formula in the PC is the innovation that Microsoft brings to the everchanging software race.
- Sony – Before the revolution of iPods, Sony was the undisputed king of audible devices, thanks to the famous “Walkman”. After Sony lost the audio race to Apple, it began to innovate in other products such as mobile phones, PlayStation, and other consumer electronics. Suffice to say Sony is still a steadfast leader among electronics in the modern world.
- Ford – A well-known name in the automobile industry that opened its doors in 1903 and continues to roll out the world’s most sleek and opulent cars. With a 100-year history, surely the company is hitting all the right buttons to attract generations of customers into its moving assembly line.
The following companies utilize a simplistic formula of keeping their original promises while adding a touch of modern innovation to their products. That’s the secret to staying relevant with your vision.
Superior Customer and Employee Engagement
When a brand doesn’t treat its customers or employees with respect, the fire is lit and soon there is a destruction in its wake. A vision of a brand must engage customers and employees with a positive influence if its brand is meant to be valued.
There needs to be an Employment Engagement Program set up to ensure there is recognition for your brand’s workforce. When an employee is satisfied, the brand grows, and the organization begins to reinforce itself with positive ideology.
Similarly, by offering exceptional customer experience, a brand becomes trusted in the eyes of its customers. Positive word of mouth gets out and soon the brand becomes a legacy that speaks for decades after its inception.
Rule 5. Develop a Business Timeline
The final rule to ensure your idea enters an actionable stage is to develop a schedule to abide by. No entrepreneurial dream is complete without taking a step-by-step approach.
Timelines are different from milestones, while milestones provide information on what you wish to achieve, a timeline provides information on what your current focus is on.
Here is a list of things your timeline could include –
- A complete product development blueprint
- Accessing office space to run your business
- Acquiring necessary permits and licenses
- Hiring legal advisor to ensure no laws are broken
- Research and development stage
- Purchase of assets and raw materials
- Hiring workforce
- Setting up a launch date
- Developing a contingency plan
- Safety hazards covered
A timeline ensures there’s no room for delay. The plan should be on the move as per a scheduled plan.
When your business is in motion according to your plan, you know you are ticking the right checkpoints at the right times.
Next, if something feels left out. Ask yourself questions pertaining to your business.
What are the 4 important time goals that I’d like to achieve on time?
- Finalize business idea (2 weeks)
- Brainstorm product idea (1 week)
- Lease business space (1 month)
- Secure business loan (3months)
By asking yourself what are the immediate 4 goals that you’d want to focus on.
You’ve got 4 different start points with the ideal time required to complete them.
Similarly, have a monthly plan to reach time checkpoints. Examples are –
Month 1 – Complete Discussion Phase of Business Plan
Month 2 – Consult Advisor and Research Products
Month 3 – Secure knowledge of competitors
Month 4 – Execute Financial Goals for Business
And you get the idea. When you give yourself a timeline to achieve a time goal, you’ll be disciplined and will increase your overall productivity and will focus on your business idea.
Time planning is a conscious decision and requires your full cooperation.
Chances are once you work with your goals based on duration, you’ll develop an established platform to envision your business idea into an action plan.
FINAL THOUGHTS ON BUILDING AN INNOVATIVE ACTION PLAN FOR YOUR BUSINESS IDEA
While profitability is important, it’s not nearly as important as innovation.
Bringing technology and utilizing modern knowledge to upgrade your products leads to an everlasting brand.
By revamping work practices, techniques, and employee engagement, your business will grow to encompass all the right ideals that you always dreamed about when you first had your business idea.
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